Attorney General Martha Coakley Recovers Over $90,000 in Overcharges From Insurance Brokerage Firm
Case is follow up to Attorney General's $4 Million Recovery from William Gallagher Associates
"It is deceptive for insurance agents or brokers to enter into fee agreements with customers and also take undisclosed commission payments from insurance companies," said Attorney General Coakley. "Such practices unfairly inflate insurance costs for businesses and consumers and will not be tolerated in Massachusetts. However, we remain pleased that Beecher Carlson cooperated from the outset with our review and agreed to make restitution payments to affected customers."
Under the terms of the settlement, filed in Suffolk Superior Court, Beecher will refund over $90,000 to seven customers, including three Massachusetts-based companies and pay $25,000 to the state. Additionally, Beecher will reform its fee and commission practices so as to provide written disclosure of all compensation to its fee based customers.
The Attorney General's Office began its review of Beecher Carlson after some former employees of William Gallagher Associates joined Beecher. Those employees had been involved in the fee transactions that were part of the Attorney General's December, 2007 lawsuit against William Gallagher Associates Insurance Brokers, Inc. began working at Beecher Carlson. The Attorney General's lawsuit against William Gallagher Associates alleged that the company had charged its customers' undisclosed fees by misrepresenting those fees as insurance premiums and that it had taken both fees and commissions on certain insurance placements. The lawsuit was resolved in 2007 by a consent judgment that required the company to return over $3.3 million dollars to its customers, pay over $1 million to the Commonwealth, and adopt transparent compensation practices going forward.
Beecher Carlson is an Atlanta-based brokerage firm with a Boston office located at 84 State Street.
In the past three years, the Attorney General's Office has brought nearly a dozen cases relating to unfair and deceptive insurance compensation practices. Most recently, it filed a lawsuit against Kilgore Insurance Agency, which, like William Gallagher Associates, is alleged to have charged millions of dollars in undisclosed fees to its customers by representing those fees to be insurance premiums.
Companies and consumers who believe they were charged undisclosed fees or both fees and commissions by an insurance agent or broker are urged to report their experiences to the Attorney General's Insurance & Financial Services Division by calling 1-888-830-6277.
Today's settlement was handled by Investigations Supervisor Arwen Thoman and Assistant Attorney General Glenn Kaplan, both of Attorney General Coakley's Insurance & Financial Services Division.